Assignment 1

Student ID: Date: 14th October 2022

Code: HRM-301 Class: BBA(4years)-6 & BBA(2years)-

Course: Human Resource Management Duration: Two Weeks
Instructor: Sahar Khan Marks: 15 Marks

Q. Select any Organization of your choice, it can be a Multinational or Local

Organization. Prepare a descriptive report on that Organization that how
they are applying the Corporate, Competitive and Functional Strategies in
their Organization.

INTRODUCTION AND HISTROY:

Gender: Female, Male and kids

Genre: Clothing
Industry: Consumer Goods
Age: 25 years founded in December 13, 1998
Meaning: Khaadi means „‟HAND-WOVEN‟‟
Type: private
No. of locations: 54 outlets

In 1998, founder and Chief Executive Officer, Shamoon Sultan, set out to revive the ancient
craft of the handloom. . What began as a single store start-up in Karachi, Pakistan has quickly
transformed into a robust brand with international presence Khaadi is an Urdu word which
means „hand-woven‟. Weaving, an intricate process requiring patience and attention to detail
creates fabric whose characteristics are dependent on the threads and the method in which those
threads are woven. The same ideology is not only applied to all Khaadi products, but also to the
institution we are continuously building. Our success today can be attributed to the collaborative
efforts of our team and the individuality each employee brings to the organization. Khaadi is now
a household name in Pakistan, with 54 stores at almost every notable location and in all major
malls across the country. We employ over 1,900 people in Pakistan. Today, we can proudly say
Khaadi was a game changer in the fast fashion retailing landscape in Pakistan. By investing in
the overall retail experience, we ensure our customers have access to the latest fashion trends and
receive the best service possible while shopping in our stores. We are also the first Pakistani
fashion retail brand to establish a successful international presence with stores in the United Arab
Emirates and United Kingdom. Our online store has made it possible for customers around the
world to order Khaadi products with the click of a button. And this is just the beginning. The
traditional is merging with a renewed sense of pride. Khaadi took initiative with retailing the
hand loomed fabric. Khaadi defines its lines as Concepts and initially had Prêt (Ready-to-Wear),
Unstitched (Fabric) and Man (Eastern Wear). Over the years, Khaadi has introduced a number of
new Concepts including Khaas (featuring exclusive and limited-edition pieces), Kids (for 2-12
year olds), Accessories (jewelry, stoles and handbags) and Home (featuring furniture, bedding
and bath items). Khaadi-One of the Leading Brand in Fashion Industry

Competitive Strategies:

It has been found from the analysis of Michael porter's generic strategies that there are different
business strategies that organizations are using in the market, and each organization is focusing on
one strategy to become successful in the business. The main purpose of Khaadi for using this
business strategy is to enhance the performance of the business that is the major focus of the
business. The business strategy that Khaadi is using includes the "Focused Cost Leadership Strategy"
that gives different benefits to the organization. The data collected from the research has claimed that
the price of the products of Khaadi is less as compared to other brands such as Nishat linen, Sana
Safinaz, and limelight. The major focus of giving less price to the customers is to market hem loyal
so that they can give long-term benefits to the organization. It has been found that the major goal of
the organization in implementing this strategy is to get a dominant market share and make it complex
or impossible for other organizations to gain competitive advantages. The implementation of a
focused cost leadership strategy has enabled the organization to increase the sales rate so that the
profit margin can also become increase. Thus it has become clear that Khaadi is getting success in
the price war of the clothing brand industry; as a result, the organization becomes able to gain
competitive advantages. Michael Porter Generic Strategies has made it clear that there are more
chances of getting long-term effects of the organization in the future.

Visioning strategies (Khaadi Mission, Vision & Values)

Khaadi Mission Statement

To establish stores with global footprint
Khaadi Vision Statement
To revive the ancient craft of the handloom, reinterpreting it within a more contemporary and
fashion focused context, to suit the high street. The CEO main goal is to become the NO#1 retail
brand in Pakistan.

Khaadi Values
 Ethics
 Social responsibility
 Commitment
 Sustainability

COOPERATE CULTURE OF KHAADI:

Khaadi has strong work force or labor and their employees are very enthusiastic with full of
energy, the reason behind this is very interesting that their employees are average of 28 years as
far as their age is concerned with huge number of 1350 representing 18 nationalities and Khaadi
is also focused on making leaders.
Support Area:
The card provides an amazing platform for women who have a passion for work and do not want
to compromise family life. We offer services such as day-to-day day care, and referral services to
help us achieve this. Female employees also enjoy the help of short working days, and take an
hour ahead of time

CULTURAL ENVIRONMENT:
Join the Demission:
Every day in Khaadi is a great day; an opportunity for self-improvement. We are young and
strong, but take the time to develop art and craftsmanship. While we love success we celebrate
our failure again, because it also gives us room to grow. They offer employees free of charge to
check and download, and aim to increase and improve each year. For us the most loving and
dedicated staff; it makes the Card a Cardinal today, and will be in the future.

Organizational Operations
Structure The Company’s overall operations are segregated into six broad divisions, namely: (i)
Designing, (ii) Commercial operations, (iii) Branding and Marketing, (iv) Human Resource, (v)
Finance, and (vi) Product strategy (vii) Supply Chain, (viii) Strategy and E-Commerce. Each of the
department is led by an experienced individual ensuring smooth operations in the Company. A large
number of senior executive’s report directly to the CEO.

Business operations
In the case of a strategic management system, Khaadi has implemented a growth strategy so that
the brand can become grow over a significant whit time. For this reason, the organization is
 practicing new locations, and the number of stores is being increased or growing within budget.
The target market of the organization is people from 5 to 50 years who are interested in the
fashion industry. The organization is allowing the people to enhance their confidence level by
improving their clothing sense, and this strategy is allowing the organization to maintain the
business efficiently. The growth strategy is giving various benefits to the business that is the
major focus of the business in the market.

Khaadi has its own dyeing unit, where all the griege thread is dyed to keep the quality of the
thread up to the mark. Khaadi has an in-house stitching unit as well, which facilitates the
designers to create new designs in the products. Khaadi has a fully equipped design studio, with a
team of highly trained designers, who make sure they bring out the best in their work, in order to
make their products stand out. Khaadi has five shops in three major cities of Pakistan, making it
the only brand which offers hand-woven fabric and other products nationwide.
As Khaadi produces every product on their own factory, the only thing they require is the basic
raw material to make all these products especially thread sequins. Khaadi's warehouse is next to
its factory in the SITE area.

After production, goods are further checked and if there is any default or any problem it is
corrected on the spot before further problems occur after the order is made. After the QC,
merchandise is tagged. Their price tags include the product name, product code, its price, sales
tax and final price after addition of sales tax. Unstitched suits are sent to the outlet without any
placement of order, as soon as some new design or color is produced. For the rest of the products,
warehouse managers use FIFO (first in first out) technique so that the merchandise isn't outdated.

Four P’s of Marketing Used by Khaadi:

1. Products:

Men, women and kids cloths (Men’s Formal, women’s casual and occasional, sportswear) ,
stoles Accessories Perfumes, jewelry, goggles, bags, clutch, notebooks, watches Home
accessories Bed sheet, duvet cover, rugs, cushions, table covers. Crockeries. Foot Wear
Sports shoes, Casual, formal, and occasional.

2 Pricing strategy:
Price is important but at the moment it is not a major factor for Khaadi. Even if it were to start
retailing an unstitched suit for Rs 2,500 and a women’s kurta for Rs 300, people would still go
for the former. It‟s very important to match the prices in such competitive market. It is about
making things affordable for everyone. The company follows a discount-based pricing model in
its marketing mix and offers sales on products in major off seasons. The organization offers an
assortment of items in premium section design and way of life and charge premium costs at a
higher fragment dependent on its worth.

Positioning:
Khaadi has many retail store and online shopping websites in many regions and also have
physical outlet existence in UAE, Canada and now in US.
● Its online store theme is design on the bases of attracting the customers and making it easy to
use for them and it has different languages so the buyer won’t confuse or hesitate to reach out to
us.
● Different style and prints of this brand give elegance in the garments. Also, hues and refreshed
prints make individuals turning upward to date and the style makes it novel over others. It
signifies their excellence so it looks superficial point of interest for them. Strong Fabric, Unique
prints make it separated from others.
● As the US is a western country so the design and style of the dress is based on both kind of
people who wants to wear traditional but in some unique style.
● Tommy Hilfiger will also have a great fashion sense according to the region so both the
companies will be adoptable of the customer’s mind.
● Theme of the outlet will be according its meaning which is “hand woven.”
● Concepts –, for example, visual promoting (the utilization of alluring, occasional themed shop
windows to pull in expected clients), making appealing, shading composed store presentations to
get the client's attention and utilizing littler paths to persistently draw to the customer's advantage
(all in accordance with global practices) are being embraced by Khaadi to stand apart from the
opposition.

Promotion:
● Khaadi started exporting its product to various regions in 2010, and entered in to the
international markets.
● Its 1st online store was launched in 2014 which was the great opener of the digital market in
various countries for Khaadi.
● Collaboration with the brand like Tommy Hilfiger has the great impact on promotion Khaadi
brand.
● Its outlet will show the tradition of Pakistan with it colors and the interior will reflect the
culture of the United States.
● Khaadi’s brand image or logo is itself a promotional look, on the other hand Khaadi use
networking for promotion.
● It is relying on the power of social networking but currently signing Esra Bigliç as brand
ambassador. ● Discount card offer throughout the game segments in collage, universities and
expo.
● Web advertisement and seasonal sale up to 40% is use as promotional strategy
● Offer free goodies and shopping bags to their customers and famous bloggers.
● It also sends emails and text messages to its potential customers and showcasing the latest
arrivals to develop loyal relationship with customers.

ANALYSIS:
Analyze how international expansion will add value to the company: Two of the most visible
benefits that will happen through this expansion are diversification and competitive advantage.
The diversification of Khaadi will let the company operate in a market or economy which
fluctuates less or is more on the stable side such as America, so this will enable them to continue
operating in such places and also cause negative growth in one market like Pakistan but continue
operating successfully in another like America. The competitive advantage in Khaadi’s situation
will definitely be its collaboration in the American market which is with “Tommy Hilfiger”, by
which it will also be introducing the western clothing line. This has never happened before and
with a physical outlet to reach the costumers the experience will be far better. This has never
been done before by any other Pakistani brand and this exposure will definitely do wonders.
Assess the company’s internal capability for international expansion:
If the capability criteria is looked upon, then Khaadi is precisely the fashion brand that has made
a strong customer base in its country of origin and its move into the foreign market was clearly
based on the demands from foreign based Pakistani customers and their needs were to be
fulfilled. And in Khaadi’s initial research survey the research team was able to figure out the
demanding areas which were to be catered and which were to remain untouched. That’s why out
of all the cities in USA, one was chosen as the first step “Houston, Texas” and the rest were for
further expansion. This had a huge chunk of The Pakistani population living in it which was the
perfect target market. And Khaadi has also seen growth over the past five years or so which was
the key element which led to global expansions, which also looked like the perfect time to
expand into new markets.
Suggest what markets it should enter and how:
As long as the current policy of Khaadi suggests that it always enters in markets that have its
potential customers, just like in the case of U.A.E, UK and now USA. There are approximately
8.8 million Pakistanis living abroad, with the vast majority, over 4.7 million, residing in the
Middle East, third-largest community, at around 1.2 million, live in the United Kingdom and
above half a million people in the United States of America. Khaadi has a close eye on such
markets and is prompt in responding or catering to its demands.
Identify possible challenges that may arise in the process of international expansion:
Already mentioned above in the SWOT Analysis the major reasons that should be kept in mind
and should be worked upon are the external factors such as the Economic, Social and Political.
Various economic factors influence an organization’s ability to compete and consumer’s
willingness and ability to buy products and services. The state of the economy is always
changing–interest rates rise and fall, inflation increases and decreases. Consumer buying power.
Economic changes, demand and supply sides of the market, all of this should be known by a
marketer. The political environment in countries throughout Europe and Asia differs from that of
the United States. The U.S. is capitalist society, it operates an economic system where both the
government and private enterprise direct the economy. In other words, the U.S. government
combines free enterprise with a progressive income tax, and at times, steps in to support and
protect American industry from competition from overseas. For example, in the 1980s the
government sought to protect the automobile industry by “voluntary” export restrictions from
Japan. Such things can also come up in the American Fashion Industry if not now but possibly in
future. Even the political relations between the country plays a vital role and impacts the foreign
operations being conducted in the host country

Financial
Working Capital Receivables and inventory days increased due to the impact of COVID-19 and
payables remained stagnant led to a decline in net working capital days (FY21: -46days, FY20: -
30days). Additionally, Khaadi borrowed short-term loans for fulfilling its working capital needs.
The low-cost borrowing benefits in keeping the overall Group’s finance cost low. STBs clocked
in more than total net current assets which resulted in negative short-term trade leverage at -
37.2% in FY21 (FY20: - 23.4%).
AF Ferguson & Co Company (PwC) is the external auditor of the Company. The auditors have
expressed an unqualified opinion on the financial reports for the periods ended 30th June 2020.
The Company does not have an in-ho. Over the years, Khaadi has grown into a big retail brand
with total assets of ~PKR 17bln, equity of ~PKR 1.1bln. Total leveraging for the Group remains
fairly aggressive with total annual revenues of ~PKR 16bln.

Coverages Khaadi’s cash flows (FCFO) improved (FY21: PKR 1.64bln, FY20: PKR 913mln).
Similarly, Interest coverage slightly improved (FY21: 1.5x, FY20: 0.7x) due to a decline in
finance cost. The debt coverages also improved slightly (FY21: 0.5x, FY20: 0.3x) because of
CMLTD as the Company has opted for a long-term loan. Capitalization Khaadi has a highly
leveraged capital structure of 74.2% in FY21 (FY20: 75.4%). The Company's discussion with
the foreign investor is at an advanced stage and the equity is expected to be injected in the
second half of FY22 and after that, the equity base is expected to be improved.